Why $QQQ Has 2x'd $SPY the Past 17 Years

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Happy Sunday.

Tech is winning. Here are some sectors within I’m paying attention too.

The Nasdaq-100 has outperformed the S&P 500 since the 2008 financial crisis. 

Here's what that means in real numbers:

Since 2008:

• The Nasdaq-100 (QQQ) delivered a total return of approximately 1,079.87%

• The S&P 500 delivered a total return of approximately 514.32%

In dollar terms, a $1 investment grew to:

• QQQ: $11.80

• S&P 500: $6.14
  
  

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AI’s Sucking up All the Money (And For Good Reason)

Here’s something wild: one in every three venture capital dollars is now going to AI startups. These companies aren’t just getting funded – they’re racing to unicorn status in record time. While traditional startups typically need nine years to hit that coveted $1 billion “unicorn” valuation, AI companies are doing it in just two. And they’re doing it with smaller teams too – about 200 people compared to the usual 400+.

• In 2015, only 6% of new unicorns were AI companies

• By 2024, 44% of new unicorns are AI companies

To put this in perspective:

• In 2015, out of 101 companies that became unicorns, only about 6 were AI-focused

• In 2024, out of 72 companies that became unicorns, about 32 were AI-focused

Big Tech’s Spending Spree Is Getting Serious

The tech giants aren’t sitting around, either. They’re pouring an estimated whopping $200 billion into AI infrastructure this year. Think massive data centers, specialized hardware, and enough computing power to make your gaming PC look like a calculator. What’s interesting is how this affects other industries – higher spending is energizing the entire value chain, with nuclear and renewable power providers seeing surging demand for clean energy..

AI Agents: Coming for our jobs?

You know that surprisingly natural sales call you got last week? Might've been an AI agent, not a human. These digital workers are already transforming how business gets done - handling everything from customer support to complex data crunching.

The market's on fire - funding for AI agent startups doubled in 2024, and they're not just experimenting anymore. Over 40% of these companies are now actively deploying their bots in real-world situations, with another 9% hitting the scaling phase. They're moving fast, as companies rush to cut costs and automate the repetitive tasks humans don't want to do or pay for.

Fintech and Digital Health: The Unexpected Underdogs

While AI's star keeps rising, fintech and digital health are taking a beating. Spooked investors have sent funding to rock-bottom levels, and fintech valuations have cratered to just $1.1M per employee.

But here's the twist - industry giants are licking their chops. Cash-rich players can now snag promising startups at bargain prices, sparking a wave of consolidation. For smart investors, today's pain could be tomorrow's gain once these sectors find their footing again.

Think of it like a tech fire sale - and the big fish are ready to go shopping.

AI Meets Medicine: The Race Is On

Every major pharmaceutical giant is now betting big on AI to discover breakthrough drugs faster and cheaper. They're not just partnering with AI startups - they're building their own AI labs too. The message is clear: evolve or get left behind.

But here's the catch - getting an AI-discovered drug from the lab to your local pharmacy isn't easy. Regulatory hurdles still loom large. Yet the AI drug discovery race is only accelerating. Why? Because the first company to crack the code could revolutionize medicine as we know it.

The future of drug discovery isn't in a test tube - it's in an algorithm.

Quantum Computing: Finally Getting Real

Investors are pouring over $1 billion yearly into quantum startups, betting big on computers that harness the bizarre physics of the quantum realm.

Why should you care? Because quantum computers could crack problems that would take today's fastest supercomputers millions of years. Banks, drug companies, and shipping giants are already lining up to use them. They see the writing on the wall: quantum isn't just coming - it's already here.

2025 could be the year quantum computers go from lab curiosity to business necessity. The future looks both strange and promising.

The tech revolution isn't coming. It's already here.

Stay curious 🙂 

- John


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Note: This analysis is based on current trends and data. Tech moves fast, so always do your own research.